What 3 of the World’s Smartest Hoteliers Have to Say About the Future of Hotels

Greg Oates, Skift

- Aug 07, 2015 7:02 am

Skift Take

By investing in Austin’s super hip Bunkhouse hospitality group, The Standard Hotels can now bring its global gateway grooviness to trendy second tier cities in North America.

— Greg Oates

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When The Standard Hotels invested a 51% stake in the Austin-based Bunkhouse Group last month, it was as much a meeting of hospitality hearts as it was minds for two of the world’s most attuned hotel brands.

Speaking with Amar Lalvani, managing partner of The Standard Hotels, and Liz Lambert, owner of Bunkhouse Group, it’s clear there’s a mutual admiration for the hotel design and guest experiences that each has developed over the years, above and beyond the success of their business models.

For those not familiar with the Bunkhouse Group, it’s a collection of three boutique hotels in Austin and San Antonio, and a funky vintage trailer/teepee camp in Marfa, Texas. They are the very personification of local and independent hospitality, and they’re a catalyst that helps attract other creative businesses and residents to the area.

The cash infusion from The Standard allows Lambert to grow her Bunkhouse brand more robustly and tap into the innovative digital platforms that Lalvani has developed around mobile bookings like the One Night Standard app.

For The Standard, the partnership offers an opportunity to enter more second tier North American markets that wouldn’t be appropriate for the more global Standard brand, presently operating in New York, Miami and Los Angeles, with London on deck.

The next Bunkhouse property is the Tres Santos Hotel San Cristobal on the southwestern coast of Mexico’s Baja peninsula within the new Tres Santos development. Chip Conley, head of global hospitality for Airbnb, and founder of Joie de Vivre Hotels, is one of the principles in Tres Santos. He says the overall hospitality experience at Tres Santos embraces wellness, well-being and community engagement.

When Lambert was first starting out as a fledgling hotelier following a successful law career, she reached out to Conley for advice, and the two have remained close since.

Meanwhile, Lambert met Lalvani during his frequent escapes to her Hotel San Jose and Hotel St. Cecilia in Austin over the years.

Following is a slightly edited compilation of our conversations with Lambert, Lalvani, and Conley, sourced over multiple emails and phone calls.

Skift: Liz and Amar, what motivated The Standard Hotels and Bunkhouse Group partnership?

Liz Lambert: What motivated it was a relationship that developed organically over a period of time. Amar started coming down often to visit and I think it just so happened that he was getting into the position he was with The Standard, and I think he came as a guest of both San Jose and Saint Cecilia initially, and we began talking and found a lot of commonality in the ways that we approached things. The more we talked the luckier I felt to have developed the relationship a little more, and also to have Standard International interested in investing in Bunkhouse. Because we were at a point in our growth when we really needed more resources and it would be a huge help to have a bigger platform for us at the time.

Amar Lalvani: From my perspective, I’d really fell in love with what Liz and her team had created. I’m just really a fan, and at the same time just really fell in love with Austin, and to me they’re almost one and the same. Then I started thinking more about it and getting to know Liz, and how we could be a great complement to each other because the way we approach things is very similar. I was really surprised by how similar our philosophies were, but how they could be translated in such a different voice, and to me that was very interesting.

Standard resonates in kind of global gateway markets, in New York, L.A. and Miami, and we’re moving into London and places beyond that around the world. But with Bunkhouse, there’s some very cool, interesting, fun and dynamic places in the U.S. in particular. Places like Austin and Nashville and Portland, and other places where Liz and her team’s voice would resonate more appropriately than ours.

So I was just fascinated with Liz’s team’s ability to run smaller hotels and make them really work. It’s a very different model than other people. I think the combination of the complementary voices that we have and the philosophies, and also the ability that her team showed to do a really good job in those kind of markets and in smaller hotels, is what makes this interesting.

Skift: Can either of you name any specific new destinations you’re looking at, beyond London and Mexico?

Lambert: We’re continually looking and interested in a lot of places, like New Orleans and Nashville, and maybe Portland. Some people might call them secondary markets, but for us they’re places with a story, and with history, and they’re places that interest me to travel to.

Lalvani: A lot of our focus is on London right now because that’s going to be the international flagship for us, and open up Standard for the rest of the world. London will likely open the end of 2017. They’ve started work within the building already, so it’s moving.

Skift: Where in London are you opening?

Lalvani: It’s in Kings Cross, right across the street from the St. Pancras station where the Eurostar now goes in, and it’s exactly the kind of neighborhood that we like. Which is, when other people look at it and they say, “Wow, that neighborhood, really? Isn’t it full of X, Y or Z?” Whereas we look at what’s forthcoming there. It’s four blocks away from Google’s European headquarters. It’s a really interesting neighborhood and community, and the town council of Camden building that we’ve taken over has got a very rich history.

A lot of other companies looked at that building. Many said it was ugly. Many said the area doesn’t work. Many said the floor plan doesn’t work. Everybody said no. But with the way Andre [Balazs] looks at things, the same way Liz looks at things, we were able to look beyond the constraints to actually use those constraints to benefit.

I think it’s much like what happened at the Standard High Line, which everybody wondered about opening in a meat packing district. You know, why would you go there? And then look at what it is today, with the Whitney opening up next door. We feel very similarly about King’s Cross.

Skift: Will The Standard’s involvement in Bunkhouse impact the guest experience at the Bunkhouse properties at all?

Lambert: Yes and no. I mean, yes, absolutely in a way that Standard is bringing a lot more resources and deeper bench strength. They bring a lot of things that we don’t necessarily have. There’s a lot of forward thinking technology that will add to the guest experience at the existing Bunkhouse properties and new properties going forward.

But on the face of it, Bunkhouse properties are not going to become more like Standard’s. The San Jose isn’t going to get morphed into a Standard. They’ll very much be the same hotels they always have been, and true to their DNA, which is a lot about the community that they’re in.

I think it’s something that we do pretty naturally, and I know Bunkhouse will always continue to do that, which is to really delve into a community and be a neighborhood hotel and be about the place. I think that’s what its purpose is, more than anything, is being really community driven. That means everyone from the person who works the front desk to the artisans we use, to just being part of the fabric of the neighborhood.

Lalvani: We invested in Liz and her company because of what they already do so well, so there’s no intent from anyone for them to do anything different. Actually, what they do right now is what we were attracted to. I also did tell Liz that building another management company, a new upscale brand and all the infrastructure that’s required to do that successfully today is a big endeavor. Especially in the realm of technology and CRM and all the back infrastructure that’s necessary today that we’ve already done.

So I said it would be great to focus and elaborate on the things that she does and enjoys, and what the team’s always done really well, which is all the guest-facing aspects of it. But allowing us and enabling her to do more of what she does well by taking on some of the back-end infrastructure work.

Skift: We’ll come back to the tech side in a bit, but moving on to Mexico, and this is for Chip and Liz, what was the motivation to get involved in the Tres Santos hotel project?

Chip Conley: I’ve always loved feeling healthy, especially on vacation, but no one really captures what I’d love to see all in one place: organic cuisine, adventure sports, meditation and yoga embedded in the community; and beach, desert and mountains all quite accessible and within a relatively short plane ride from where I live in San Francisco.

I discovered Todos Santos, the magical town in southern Baja, just days before I learned of the Tres Santos project and its desire to become the epicenter of wellness. So, I’m pretty deeply drawn to both the place and the project.

Lambert: Well, first of all, the reason I got involved in the project was because Chip called me. Chip is a good and dear friend of mine, but he was also my mentor when I started in the hotel business, whether he knew it or not at the time. I called Chip when I first got to the San Jose, and I had no idea what I was doing, and the rate was $28 a night, and I was trying to figure out how to get a bank loan and nobody would loan me money. I was reading a trade magazine and came across Chip, and I somehow found his phone number and called him. He actually called me back 30 minutes later.

When I first went down to Todos Santos, I immediately fell in love with the little beach town that’s there. It’s about 45 minutes to an hour from Cabo, and it couldn’t be more polar opposite than Cabo. Todos Santos is this great little town that’s for local artists and fishermen, and it sits on an aquifer so there’s actually farming going on. You couldn’t have a more different organic experience in Baja than you can in Todos Santos, so that’s what attracted us to that. It should open at the latest in early summer of 2016.

Skift: Chip, what contributions have you made to the strategy and design behind the Tres Santos Hotel San Cristobal?

Conley: My number one contribution has been getting my good friend Liz Lambert and Bunkhouse Hotels involved as the designer and hotel manager. More than 15 years ago, when Liz reached out to me as she was creating her first hotel in Austin, I gave her some advice and lent her the general manager of my first hotel, The Phoenix. I’ve been a big fan of Liz’s inspired and eclectic work ever since. I’ve done lots of great brainstorming with her, and the developer and I am thrilled that this kind of small, soulful beach resort will open next year. It will be a model for boutique resorts around the world.

Skift: How will the guest experience align with consumer trends in 2016?

Conley: Our quest for connecting more deeply with our body, mind and spirit has been a long-time trend through the decades, but Hotel San Cristobal and the larger Tres Santos project give visitors the ability to dabble with more depth. For example, I’m looking forward to doing a two-week immersion learning Spanish, surfing and yoga all at the same time.

I can also feel disconnected from my life back home, although my iPhone is just a reach away and the data service is good down there. A growing trend or reaction to our more digital lives is the need for digital detox. I tell my friends I’m going to Baja and won’t be online much even though I have full coverage, so it means I’m not getting people reaching out to me as much as usual.

And because this area has so much to offer—one morning, I did a mountain bike, yoga, surf lesson and then a cooking school experience all before a 2 pm siesta—it is easy to get off the grid because there’s so many lovely distractions that help you feel better.

Skift: Amar, It sounds like there’s a fair amount of potential new opportunities for Bunkhouse-managed properties in North America. Can you expound on the back-end tech developments that you touched on previously, and how Bunkhouse can leverage those?

Lalvani: If you look at we’ve done with One Night Standard as an example, it’s about the forward thinking nature of what I’m trying to do as it relates to channel management and bookings and those kind of things. We’re building a team that is really interested and focused and thinking about those things, and that knowledge with ultimately help Bunkhouse in more of the back office infrastructure.

I think to start, mobile bookings are increasing at a very rapid clip, between 40 and 50% per year. Website bookings are flat and all traditional channels are really dropping like a rock, so that’s one very important element.

The other thing we’ve seen very clearly is booking windows are shortening, so that’s the emphasis on One Night Standard. I think no one has ever truly figured out what to do with excess inventory in hotels. Hotel Tonight came along and they had a 24-hour booking window, and now they have a 7-day booking window, which erodes a bit of what they were offering.

But to be able to do it on a truly private network, and we’ve studied this very deeply, is interesting. Between 12 pm noon and 3 pm, we saw you still had meaningful bookings. After 3 pm it was really unused. So what One Night Standard enabled us to do was offer Standard loyalists the best deal out there, but in a very fun, interesting, engaging, creative way, as opposed to a comparison shopping way like an OTA would do.

So we think we’ve changed guest behavior in a lot of ways, and we’re offering something special, while at the same time taking back share from the OTA.

Skift: What are your priorities for the new Standard Hotels website under development?

Lalvani: So the new website will really streamline and simplify booking, because not only are booking windows shortening, but people expect from an expedience aspect the one-click [functionality] that we offer at One Night Standard. You’re going to get that very quickly with the new website.

And more important is the culture of what Standard is, and I know that holds true for Bunkhouse as well. So, like we do with Standard Culture, which is something that goes well beyond the four walls of our hotels, I think you’ll see a lot more presence in terms of the cultural aspects on the website. It’s really all about combining culture with the speed and that accessibility that people want in order to deliver the best Uber-like functionality out there.